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Warnaco Group Earnings Preview

Warnaco Group will unveil its latest earnings on Monday, August 1.

Warnaco Group(NYSE: WRC) didn't hit the Street's expectations last quarter, but investors hope that it will rebound this quarter. The company will unveil its latest earnings on Monday, August 1. Warnaco Group designs, sources, markets, licenses and distributes a line of intimate apparel, sportswear and swimwear worldwide.

What analysts say:

Buy, sell, or hold?: The majority of analysts back Warnaco Group as a buy. But with 54.5% of analysts rating it a buy, Warnaco Group is still below the mean analyst rating of its nearest nine competitors, which average 71.9% buys. Analysts don't like Warnaco Group as much as competitor Hanesbrands overall. Six out of nine analysts rate Hanesbrands a buy compared to six of 11 for Warnaco Group. While analysts still rate the stock a moderate buy, they are a little more optimistic about it compared to three months ago.

Revenue Forecasts: On average, analysts predict $581 million in revenue this quarter. That would represent a rise of 11.9% from the year-ago quarter.

Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.80 per share. Estimates range from $0.74 to $0.92.

What our community says:CAPS All-Stars are solidly backing the stock with 95.7% awarding it an "outperform" rating. The community at large concurs with the All-Stars with 93.5% granting it a rating of "outperform." Fools are keen on Warnaco Group, though the message boards have been quiet lately with only 38 posts in the past 30 days. Warnaco Group has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:Warnaco Group's profit has risen year over year by an average of 43.6%.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

44.6%

43%

45.1%

44.2%

Operating Margin

10.5%

7.6%

11.4%

10.7%

Net Margin

6.6%

3.2%

7%

5.8%

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